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The Canadian government intends to challenge the constitutionality of a
new law prohibiting companies from requiring genetic testing or disclosing test results,
a government official told Bloomberg BNA May 8.

The Act to Prohibit and Prevent Genetic Discrimination, which took effect May 4 when
it received royal assent after passage by the Canadian Parliament, prohibits any person
from requiring an individual to undergo genetic testing or disclose the results of
a genetic test as a condition of providing goods or services or entering into or continuing
a contract or agreement. The law sets top fines of up to C$1 million ($730,000) and/or
jail terms of up to five years for the most serious violations.

The law is immediately enforceable. Regardless of the pending constitutional challenge,
companies doing business in Canada, particularly insurers, that rely on genetic testing
should check their policies and procedures.

The law adds genetic information to the list of protected data under the Privacy Act
and the Personal Information Protection and Electronic Documents Act. It amends the
Canada Labour Code to protect workers in federally regulated industries, such telecommunications,
banking and transportation. The law also amends the Canadian Human Rights Act to add
genetic characteristics as a prohibited basis for employment, housing and provision
of goods or services discrimination.

The new law technically applies to Canadian employers, prohibiting them from requiring
employees to undergo genetic tests or disclose test results, Eloise Gratton, a privacy
partner with Borden Ladner Gervais in Montreal and national co-leader of the firm’s
Privacy and Data Security Law Group, told Bloomberg BNA May 8. However, it will likely
only affect the insurance industry’s relationship with its customers as, to date,
no employers have wanted to request such tests or refused to hire or planned to dismiss
employees based on genetic information, Gratton said.

The legislation’s broad scope, and the lack of a transition period before taking effect,
will increase administrative costs for insurance companies, and the loss of access
to genetic testing information means higher costs that will be passed along to consumers,
insurance industry officials said.

Government Concerns

Prime Minister Justin Trudeau’s government respects the will of Parliament in adopting
the legislation, a spokeswoman for federal Justice Minister Judy Wilson-Raybould said
May 8. But the government intends to ask the Supreme Court of Canada to review whether
the law’s provisions are constitutional.

In a November 2016 appearance before the House of Commons Justice and Human Rights
Committee, Wilson-Raybould raised concerns the prohibitions could go beyond Parliament’s
legislative jurisdiction. Regulation of contracts and provision of goods and services
normally fall under provincial jurisdiction, she said.

Canada doesn’t generally use criminal law prosecutions and penalties to address cases
of discrimination, so the legislation could potentially compromise parallel discrimination
complaints filed under federal or provincial human rights laws, Wilson-Raybould said.

Kathleen Davis, the minister’s press secretary, told Bloomberg BNA that “preventing
discrimination and other forms of misuse of genetic information is a duty of all governments.”
But the government still will refer the “question of the bill’s constitutionality
to the Supreme Court of Canada for determination.”

In 2008, the U.S. set limits on the use of genetic testing data in the Genetic Information
Nondiscrimination Act.

Insurance Industry Costs

Civil rights groups supported the new law. But the insurance industry opposed the
legislation in favor of its self-regulatory approach.

The law will impose a significant burden on insurance companies, as it is much broader
than the voluntary code proposed by the industry in January 2017, Brent Mizzen, assistant
vice president of underwriting and policy with the Canadian Life and Health Insurance
Association, told Bloomberg BNA May 8. The voluntary code would have committed companies
to not request or use genetic testing information for new life insurance applications
up to C$250,000 ($182,500) after Jan. 1, 2018, Mizzen said.

The law will add compliance costs, though it’s impossible to estimate how much costs
will rise due to significant differences in size and scope of the association’s more
than 60 member companies, he said.

Estimates by the Canadian Institute of Actuaries suggest the new law could lead to
increases in term life insurance premiums of up to 30 percent for men and up to 50
percent for women, he said.

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